LinkedIn earnings preview: What to watch

Over the past two weeks, LinkedIn has made several big mobile announcements—unveiling new apps and showing how the company is "mobile-izing." The main message is threefold:

Mobile is increasingly important to its users and recruiters,

it's evolving the company to stay ahead of the trend, and

it's important for LinkedIn's bottom line.

The big question ahead of Tuesday's earnings report is what kind of impact this mobile growth is having.

After beating Wall Street estimates in each of the past four quarters, LinkedIn is expected to report more strong growth across its three divisions. Analysts project the business network's earnings will grow 43 percent from a year ago to 32 cents, while revenue is projected to grow 53 percent to $385 million.

Advertising is one area where mobile should give the company a boost. Last week, LinkedIn disclosed that its relatively new "sponsored updates" ad format—similar to a promoted post on Facebook or a promoted tweet on Twitter—now draws more than 50 percent of its revenue from mobile.

LinkedIn CEO: China one of our fastest growing countries

In an exclusive interview, LinkedIn CEO Jeff Weiner talks about the company's Q3 success, why he's not concerned about the stock's decline on disappointing guidance, and his vision for future expansion.

Goldman Sachs' Heath Terry said the company should benefit from growth in mobile ads and higher user engagement as well as strong growth in self-serve ads. Terry, projecting 33 percent growth in the division year over year, said the company's efforts to educate advertisers on its sponsored updates will pay off.

"We believe LinkedIn's efforts to educate advertisers on sponsored updates in 2Q could drive significant upside in 3Q as the product is opened up beyond the initial advertiser group," he said.

CEO Jeff Weiner on Wednesday announced that 38 percent of its visitors are mobile, up from 33 percent at the end of the second quarter.

It's "by far and away our fastest growing product or service." Weiner said at a mobile conference last week. "It's pretty amazing to think about the implications of this, and the fact that the line continues to grow up and to the right, so much so that sometime in the next year we believe we're going to cross the 50 percent threshold."

LinkedIn's biggest division, recruiting, or talent solutions, should benefit from growing market share, Cantor Fitzgerald analyst Youssef Squali said, despite a lethargic hiring market. And more of that recruiting is likely to be happening overseas.

Wedbush analyst Michael Pachter pointed out that in the quarter, LinkedIn "crossed several milestones in emerging markets," with 50 percent year-over-year growth in Brazil. This business is expected to grow faster than ads, with 55 percent year-over-year growth, according to Goldman Sachs.

The company's third division, premium subscriptions, should report the fastest growth of 62 percent, according to Goldman Sachs' projections. But Terry pointed out that the percentage of premium subscribers is tiny—just 0.365, and is likely to decline slightly from the prior quarter.

Investors will be listening closely to the earnings call for guidance into the fourth quarter and next year, and any insight into new products or services that could boost revenue—especially in the overseas market, where revenue lags user engagement.